Cite as: 596 U. S. ____ (2022) 1
Statement of ALITO, J.
SUPREME COURT OF THE UNITED STATES
TEXAS, ET AL. v. COMMISSIONER OF INTERNAL
REVENUE, ET AL.
ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 21–379. Decided March 28, 2022
The petition for a writ of certiorari is denied.
Statement of JUSTICE ALITO, with whom JUSTICE
THOMAS and JUSTICE GORSUCH join, respecting the denial
of certiorari.
This case presents a fundamental question about the lim-
its on the Federal Government’s authority to delegate its
powers to private actors. See Department of Transportation
v. Association of American Railroads, 575 U. S. 43 (2015);
Carter v. Carter Coal Co., 298 U. S. 238 (1936). Unfortu-
nately, the case presents threshold questions that could
complicate our review of that important question, but the
statutory scheme at issue here points up the need to clarify
the private non-delegation doctrine in an appropriate fu-
ture case.
I
Medicaid is a program that is jointly funded by the States
and the Federal Government, and while a State is not re-
quired to participate in the program, all have chosen or at
least found it necessary to do so.
As a condition of participation, States must ensure that
they fund their part of the program “on an actuarially sound
basis.” 42 U. S. C. §1396b(m)(2)(A)(iii). Congress did not
explain what it meant by “actuarially sound,” but the De-
partment of Health and Human Services (HHS) has defined
that term to require certification of state payment schemes
by actuaries who meet “the qualification[s]” of the Ameri-
2 TEXAS v. COMMISSIONER OF INTERNAL REVENUE
Statement of ALITO, J.
can Academy of Actuaries and “follow the practice stand-
ards established” by the Actuarial Standards Board, which
is a private entity. 42 CFR §438.6(c) (2002).
The Patient Protection and Affordable Care Act imposed
a tax called the Health Insurance Provider Fee (HIPF) as a
lump sum on all covered health insurance providers, start-
ing at $8 billion total in 2014 and rising each year after-
wards. 26 CFR §57.4(a)(3) (2021). The HIPF was assessed
annually on each provider based on its market share, which
the Internal Revenue Service calculated by reference to
each provider’s net premiums for the previous year. See
§§ 57.1(a)–(c), 57.4(a)–(d). The HIPF applied to “any entity
which provides health insurance,” excluding “any govern-
ment entity.” §9010(c)(1), 124 Stat. 866. Thus, if a State
used a private health maintenance organization (HMO) to
assist it in running its Medicaid program, as nearly all
States do, that HMO was generally “an entity” required to
pay its share of the HIPF.
In 2015, the Actuarial Standards Board published a bind-
ing definition of “actuarial soundness” as used in the Medi-
caid statute. Known as ASOP 49, this standard required
that States include funds for any “government-mandated
assessments, fees, and taxes” in their payments to private
managed-care organizations that assist States in the man-
agement of Medicaid. In simple terms, this meant that
States had to reimburse their HMOs for the cost of those
HMOs’ share of the annual HIPF. If a State did not do so,
its Medicaid payment scheme could not be certified as “ac-
tuarially sound.” Texas v. United States, 300 F. Supp. 3d
810, 845 (ND Tex. 2018). The Actuarial Standards Board
thus effectively mandated that States absorb the costs of
the HIPF taxes Congress assessed on non-government en-
tities.
Texas and four other States sued HHS in Federal District
Court in October 2015, seeking the return of the funds they
paid to cover the HIPF. The States alleged that under
Cite as: 596 U. S. ____ (2022) 3
Statement of ALITO, J.
HHS’s rule, an actuary can deprive a State of its ability to
meet the conditions of participating in Medicaid by refusing
to certify the State’s payment structure. As a consequence,
the States argued, HHS had impermissibly delegated its
authority to a private entity. While the litigation was pend-
ing, Congress repealed the HIPF in 2020, but the regulation
empowering the Actuarial Standards Board to define when
a State’s Medicaid payments can be certified remains on the
books. 42 CFR §438.7 (2021); §438.2.
In 2018, the District Court held that HHS had violated
the private non-delegation doctrine, but in July 2020, the
Fifth Circuit reversed, holding that the doctrine had not
been violated because HHS retained control over the pri-
vate entities’ process. The Court of Appeals denied rehear-
ing en banc over a dissent. Texas v. Rettig, 993 F. 3d 408
(2021) (per curiam).
II
I agree with petitioners that this case presents an im-
portant separation-of-powers question. “Our Constitution,
by careful design, prescribes a process for making law, and
with that process there are many accountability check-
points.” American Railroads, 575 U. S., at 61 (ALITO, J.,
concurring). To ensure the Government remains accounta-
ble to the public, it “ ‘cannot delegate regulatory authority
to a private entity.’ ” Ibid.; see also Carter Coal, 298 U. S.
238. Here, however, that is precisely what happened. What
was essentially a legislative determination—the actuarial
standards that a State must meet in order to participate in
Medicaid—was made not by Congress or even by the Exec-
utive Branch but by a private group. And this was no in-
consequential matter. It has cost the States hundreds of
millions of dollars.
The Government urges us not to grant review because
Congress has repealed the HIPF and therefore the delega-
4 TEXAS v. COMMISSIONER OF INTERNAL REVENUE
Statement of ALITO, J.
tion will not cause the States any future injury. The Gov-
ernment also contends that any direct challenge to the 2002
HHS regulation giving the Actuarial Standards Board its
power is barred by the applicable 6-year statute of limita-
tions. 28 U. S. C. §2401(a). The States respond that the
dictates of the Actuarial Standards Board will continue to
regulate the “ ‘complex ongoing relationship’ ” between the
States and the Federal Government in the Medicaid Act.
Maine Community Health Options v. United States, 590
U. S. ___, ___–___ (2020) (slip op., at 29–30).
In light of the complications highlighted by the Govern-
ment, I reluctantly concur in the denial of certiorari. How-
ever, if the determinations of the Actuarial Standards
Board have any future effect, review should be granted in
an appropriate case.